FCC proposes standstill in programmer/MVPD carriage disputes


One of the murkiest areas of the MVPD business is the creation and maintenance of channel lineups. Channel suppliers that are not affiliated with the parent corporation of the MVPD have a right to petition the FCC if they believe they are not being treated fairly, but have long complained that the grievance process is not working. The FCC is proposing, among other things, that existing carriage agreements remain at standstill while complaints are being addressed.

Commissioners Michael Copps and Mignon Clyburn enthusiastically welcomed the proceeding; Commissioner Robert McDowell saw the standstill portion of the proceeding to be in need of more debate and public comment.

The proposal is up for comment and reply once it’s made it into the Federal Register.

“As required by Congress,” explained the Commission, “these rules allow for the filing of complaints with the Commission alleging that an MVPD has (i) required a financial interest in a video programming vendor’s program service as a condition for carriage; (ii) coerced a video programming vendor to provide, or retaliated against a vendor for failing to provide, exclusive rights as a condition of carriage; or (iii) unreasonably restrained the ability of an unaffiliated video programming vendor to compete fairly by discriminating in video programming distribution on the basis of affiliation or nonaffiliation of vendors in the selection, terms, or conditions for carriage.”

In an earlier action related to this proceeding, the FCC set up rules aimed at:

* Codifying in our rules what a program carriage complainant must demonstrate in its complaint to establish a prima facie case of a program carriage violation;

* Providing the defendant with 60 days (rather than the current 30 days) to file an answer to a program carriage complaint;

* Establishing deadlines for action by the Media Bureau and Administrative Law Judges (“ALJ”) when acting on program carriage complaints; and

* Establishing procedures for the Media Bureau’s consideration of requests for a temporary standstill of the price, terms, and other conditions of an existing programming contract by a program carriage complainant seeking renewal of such a contract.

New proposals include:

* Modifying the program carriage statute of limitations to provide that a complaint must be filed within one year of the act that allegedly violated the rules;

* Revising discovery procedures for program carriage complaint proceedings in which the Media Bureau rules on the merits of the complaint after discovery is conducted, including expanded discovery procedures (also known as party-to-party discovery) and an automatic document production process, to ensure fairness to all parties while also ensuring compliance with the expedited resolution deadlines adopted in the Second Report and Order in MB Docket No. 07-42;

* Permitting the award of damages in program carriage cases;

* Providing the Media Bureau or ALJ with the discretion to order parties to submit their best “final offer” for the rates, terms, and conditions for the programming at issue in a complaint proceeding to assist in crafting a remedy;

* Clarifying the rule that delays the effectiveness of a mandatory carriage remedy until it is upheld by the Commission on review, including codifying a requirement that the defendant MVPD must make an evidentiary showing to the Media Bureau or an ALJ as to whether a mandatory carriage remedy would result in deletion of other programming; 

* Codifying in our rules that retaliation by an MVPD against a programming vendor for filing a program carriage complaint is actionable as a potential form of discrimination on the basis of affiliation and adopting other measures to address retaliation;

* Adopting a rule that requires a vertically integrated MVPD to negotiate in good faith with an unaffiliated programming vendor with respect to video programming that is similarly situated to video programming affiliated with the MVPD;

* Clarifying that the discrimination provision precludes a vertically integrated MVPD from discriminating on the basis of a programming vendor’s lack of affiliation with another MVPD; and

* Codifying in our rules which party bears the burden of proof in program carriage discrimination cases.